Pairs Acquired From Delta Airlines In DOT Mandated Auction

JetBlue Airways will gain additional slots at New York LaGuardia Airport and Ronald Reagan Washington National Airport, and WestJet Airlines will gain its first slots at LaGuardia.

In a news release, the U.S. DOT said the two carriers have reached binding agreements with Delta Air Lines to acquire some of its operating authority, or “slots,” at the two airports. A “slot” refers to a carrier’s authority to take off or land at an airport where flight operations are limited by the Federal Aviation Administration (FAA). DOT and the FAA required Delta and US Airways to divest a total of 48 slots amongst the two airlines as a condition for being able to exchange other slots they hold at the two airports. JetBlue and WestJet submitted successful bids for those slots in an auction conducted by the FAA. JetBlue currently operates a limited number of flights at both airports, and WestJet has no service at LaGuardia.
 
“As a result of the conditions we placed on the transfer between Delta and US Airways, consumers will benefit from new competition and services at both airports from airlines that previously had limited access, or no access at all, to those airports,” U.S. Transportation Secretary Ray LaHood said.

JetBlue will pay $40 million for eight pairs of daily slots at Reagan National and $32.0 million for eight slot pairs at LaGuardia. WestJet, a Canadian carrier, will pay $17.6 million for eight slot pairs at LaGuardia. A slot pair, or two slots, is required for a takeoff and landing during times when these rights are limited.

On Oct. 7, DOT approved a request by the carriers under which Delta would trade 42 daily slot pairs at Reagan National for 132 of US Airways’ daily slot pairs at LaGuardia. The Department placed a number of conditions on the trade to promote competition and protect consumers, including a requirement that the carriers divest themselves of eight pairs of daily slots at Reagan National and 16 pairs at LaGuardia by means of a blind auction administered by the FAA.

The bidding took place between Nov. 14 and Nov. 22, with bids submitted via e-mail. Only carriers having less than five percent of the slots at LaGuardia or Reagan National, and not code-sharing at the respective airport with a carrier that has five percent or more of the slots, were eligible to bid for the divested slots at that airport. In order to ensure that a purchaser would be able to provide meaningful new competition, all eight slot pairs at Reagan National were sold in a single bundle, and the 16 pairs at LaGuardia were sold in two bundles of eight slot pairs each. JetBlue submitted the highest bids for all three slot

A total of seven carriers participated in the bidding for the slots. The others were Allegiant Airlines, Frontier Airlines, Sun Country Airlines, Southwest Airlines and Spirit Airlines.

FMI: www.dot.gov